Medicines policy and drug company investments: the Irish experience THIS BOOK IS ABOUT MANIFESTATIONS of power in medicines and pharmaceutical industry policy. The main focus is on the Republic of Ireland but there are chapters also on drug regulation in Canada, Britain and Australia. The multinational pharma companies loom larger in Ireland than in most other countries; several chapters detail the implications for this small country of the presence of a major cluster of global drug companies. Globalisation is the hallmark of the drug sector; innovation and production occur within international networks which are mirrored by interaction between regulatory agencies which operate similar systems of control and monitoring. Since the 1990s, many aspects of product safety regulation have been standardised across the developed countries through the International Conference on Harmonization (ICH) process, sponsored by the regulatory agencies and industry associations of the USA, the European Union and Japan. While orchestrating vast scientific, economic and technological resources, the big pharma companies participate as insiders in national policy processes, such as those described in this book. Firms typically affirm a commitment to the health and economic concerns of the local jurisdiction — however governments cannot help but be sensitive to their global reach and power to choose where to invest. Globalisation is often said to have enhanced this type of structural power. Yet significant scope remains for nationally unique health policy arrangements and in drug reimbursement and pricing policy. Indeed, it may be that the very process of globalisation is eroding the advantages of big pharma vis-à-vis actors concerned with health and social policy. Governments and other non-corporate actors have ready access to information about drug company act ivi t i es everywhere, including safety and ethical controversies, and there is overlap and exchange in policy debates across the globe. An obvious case in point is Australia’s pioneering of cost-effectiveness analyses in the Pharmaceutical Benefits Scheme (PBS) listing process, a model which has attracted much international interest, and similar systems have been introduced or are under consideration in many countries. At times public health activists effectively challenge the power of the industry, as exemplified by the successful shaming of companies for access to HIV/AIDS medications in Africa. That there is a shift in drug policy dynamics is reflected in the centrality today of the notion of “partnerships”. This theme is particularly conspicuous in Australia where it underpins the National Medicines Policy (NMP). Since its inception in the early 1990s, the very premise of the NMP is that all stakeholders, including consumers, should be able to exercise some influence. It seems there is no similar framework for medicines policy in Ireland — several analyses in this book highlight the absence of effective constraints on industry power. This is explained as the outcome of economic policy which has created an unusual dependence on foreign multinationals, a development model described as inimical to economic diversity, domestic innovation and the quality of medicines regulation. (Indeed, presently Ireland is among the European countries most severely affected by the global economic crisis, which raises further doubts about this model.) It is not to be expected then that the Irish perspective lends itself to an appreciation of the countervailing powers accrued by other policy actors in the pharmaceutical sector, in some national and international contexts, or of the problems and contradictions of the big pharma model itself, much discussed in the recent trade and academic literatures. Yet this excellent collection of essays is in itself testimony to the resourcefulness and intellectual depth of the international community of public health activists. The editors are members of Health Action International, and among the contributors are analysts based in Canada (Joel Lexchin), the UK (John Abraham and Andrew Herxheimer) and Australia (Agnes Vitry and Peter R Mansfield). Several chapters explore tensions between public health and commercial interests through analyses of the incapacity or disinclination of regulatory agencies to appropriately and fearlessly assess medicinal products for safety and efficacy. The dependence of these agencies, including Australia’s Therapeutic Goods Administration (TGA), on fees and charges paid by its “clients”, that is, the pharmaceutical industry, and their general concern to retain close relations with the industry, is shown to give rise to bias in the regulatory process. John Abraham argues that institutional context and culture make scientists and others involved in drug testing and regulation unduly sensitive to commercial interests. This is illustrated by three cases studies: an analysis of the role of the sponsoring company in the production of scientific papers in support of marketing approval of a particular drug, a study of the way evidence is interpreted in the regulatory process, and an analysis of the production of international standards in the ICH process. Joel Lexchin assesses the Canadian system of so-called smart drug regulation, administered by the Therapeutic Products Directorate (TPD). This is an agency which, according to Lexchin, is strongly committed to a business-friendly environment even to the point of neglecting public health. In this context Lexchin identifies a shift in the regulatory philosophy of the TPD away from the precautionary principle, in favour of the risk management model. Risk management entails a risk–cost–benefit approach said to be premised on an assumption of safety “unless there is information to the contrary and, therefore, in general, products should be allowed unfettered access to the market and once there largely left unattended” (p. 156). Lexchin details the high priority assigned in Canada to speeding up the drug approval process while making only inadequate resources available for post-marketing surveillance. This pattern applies across the major regulatory agencies; thus “in 1999, the FDA had 1,408 employees to review new drug applications, and 72 handling the post-marketing surveillance of nearly 50,000 medicines” (p. 168). Additional evidence suggesting an unhealthy relationship between regulatory agencies and the drug industry is provided in Andrew Herxheimer’s chapter on the story of shortcomings in the regulation of SSRI antidepressants in the UK. The sales of antidepressants in the UK expanded by 300% between 1990 and 2000 as paroxetine (Seroxat), fluoxetine (Prozac) and similar products entered the market. There were early warning signs that the new SSRIs could increase risks of suicidality and drug dependence. Herxheimer details the reluctance of regulators in the UK (and other countries) to take this possibility seriously. It took many years, several inquires, and recurrent media attention, for these risks to be accepted as real and for consumer reports of adverse events to be accepted as valid inputs to the post-marketing surveillance system. In the UK, this experience “led to the discovery of serious deficiencies in the regulatory system, both in its legal basis and in the way in which the regulations are applied” (p. 181). A similar story is told in the chapter by Agnes Vitry and co-authors on the case of COX-2 inhibitors, titled “Is Australia’s National Medicines Policy Failing?”. The TGA approved the marketing of celecoxib (Celebrex) and rofecoxib (Vioxx) in 1999. These drugs were subsequently listed on the PBS as restricted benefits for specific conditions but heavily promoted “in ways that implied superior safety and efficacy over other [non-steroidal anti-inflammatory drugs], despite the fact that studies had not shown any overall safety and efficacy advantages” (p. 188). A 2003 study showed that a large proportion of prescriptions of both products were in breach of these restrictions. Vioxx was voluntarily withdrawn worldwide by Merck in 2004 after evidence of an association with increased risks of heart attacks and strokes had become incontrovertible. Celebrex was not withdrawn, but the TGA advised in 2004 that “all drugs in the class of Cox 2 inhibitors should be regarded as having an increased cardiovascular risk until more is known” (TGA Media statement 20 December 2004). The authors argue that Australia’s regulatory system, the TGA and the PBS, and associated programs for “quality use of medicines”, failed in recognising and acting on early evidence pointing to serious safety concerns. The second specific theme of the book is the success of the Republic of Ireland in attracting drug company investments. Ireland has figured only peripherally in Australian medicines policy debates. Yet the Irish experience is significant from an Australian perspective — with respect to drug company activity, this small country has achieved what Australian governments have talked about for the twenty years, with disappointing results. As a market, the Republic of Ireland, with a population of about 4 million, is not significant. Australia carries greater weight in this respect — not only because of its absolute size, but because Australia, notwithstanding perennial industry complaints about PBS pricing, has come to be viewed as a prestige market. Commercial success in Australia is seen as potentially valuable in marketing efforts elsewhere. But this has not translated into very significant investments, as distinct from supply through imports. Astonishingly, Ireland, the “Celtic Tiger”, has emerged as “the biggest net exporter of pharmaceuticals in the world, ahead of Switzerland” (p. 92). Pharmaceutical plants, mostly producing active pharmaceutical ingredients (APIs) rather than final drugs, are concentrated to the Cork region, the second largest city with a population of about 200 000. By 2004 there were 72 pharmaceutical plants in Ireland and thirteen of the global top fifteen companies had established “substantial operations” (pp. 87–8). Strategic government policy is central to this development, including a very low corporate tax rate of 12.5%. This compares with Australia’s rate of 30% and European Union corporate tax rates typically around 30–35%. A host of other industry support measures and incentives are provided through the Irish Government’s Industrial Development Authority (IDA), as detailed in a chapter by Kathy Glavanis-Grantham. Another significant factor is Ireland’s geographic location as bridgehead to Europe for US companies, particularly in the early stages of European economic integration. While a “partnership” approach, as noted, does not seem significant in Irish medicines policy, Ireland’s overall economic and social development has been framed by a model of “social partnership”. By contrast, according to a 2005 report by the Economist Intelligence Unit, in Australia “most of the global pharmaceuticals firms restrict their activities . . . to distribution”. Only “a small number” were engaged in “secondary manufacturing, and an even smaller number . . . in actives manufacturing”. There were only five instances of API production, mostly of a niche character (the alkaloid extraction from poppies in Tasmania is an exception)1 (pp. 18–19). Governments have introduced one program after another to promote the pharmaceutical industry and make Australia a competitive alternative to Singapore and Shanghai as a location for regional head offices. Yet the results are unimpressive — Australia has made no gains, in relative or even absolute terms, as a global drug industry hub. Indeed, in recent years Johnson & Johnson, Schering-Plough, Bayer, Merck, Sharp & Dohme, GlaxoSmithKline and Wyeth have announced plant closures or redundancies. What has Ireland then done right — and what are the costs and benefits of major drug-manufacturing operations? This book presents, in several chapters, a critical perspective on these issues. For example, the benefits in terms of employment are less significant than might be expected; relatively few jobs have been created. In 2004 there were about 17 000 employees in this sector with a similar number of people working in related engineering, maintenance, catering and transport sectors. The explanation is of course that drug manufacturing is highly capital intensive. Each plant typically employs only around 350 people and operations are not closely integrated with the local economy. Companies are thus not necessarily locked in for the long term — manufacturing of this type is relatively footloose and can be relocated if more favourable conditions are offered elsewhere, for example in Eastern Europe where costs may be lower and the infrastructure of similar quality. It would have been interesting to find out more about the environmental aspects of the concentration of API production to a small area around Cork; this issue is referred to only in passing. The environmental impact of such production is increasingly recognised as a problem in developing countries such as India, from where a large proportion of global API supplies is now derived. It is detailed in several chapters how the sheer economic weight of the industry constrains and influences health and medicines policy. For example, there does not seem to be a mechanism in Ireland for cost-effectiveness assessments before the listing of new drugs under the Community Drugs scheme. Generics have a weak presence; in 2003, only about 19% “of prescription items were dispensed generically” and generic substitution is not allowed (p. 113). Yet Ireland provides consumers with more comprehensive protection against drug costs than does Australia. Low income earners entitled to a “medical card” have access to free (no copayments) medical and surgical services and free prescription drugs (no copayments). Between 2001 and 2008 all residents over the age of seventy were entitled to a medical card regardless of means, but in 2009 income and assets tests were introduced. In 2005 around 30% of the population were eligible for free drugs under different schemes while copayments applied for about two-thirds of the population. This valuable volume is mostly accessible to non-experts including undergraduate students. It is of interest to an international readership concerned with a wide range of medicines policy issues. Through its particular, though not exclusive, focus on Ireland, and its remarkable experience of big pharma activities, it should serve as a useful resource to Australian readers interested in the implications of the NMP objective of sustaining a “responsible and viable medicines industry”. There is unfortunately no comparable book about Australian medicines and pharmaceutical industry policy.

Shrouded in an elitist mystique, the pharmaceutical industry has enjoyed decades of unrivalled “in-house” secrecy, protecting the integrity of their drug designs. However, recent public controversies have prised open the laboratory doors and exposed these companies as transnational corporate giants who are active ingredients in the expansion of globalisation. Power, Politics and Pharmaceuticals is a collection of articles written by a multidisciplinary group of contributors; ranging from experts in drug regulation and pharmacoeconomics to social science. Putting the existing systems which regulate the pharmaceutical industry under the microscope, it examines how and why these companies have undergone such an economic mutation and, through this, offers a unique hypothesis on the structure of power in the world today. These articles portray the pharmaceutical industry as virus-like, invading all sectors of influence until becoming an opaque, yet significant, transnational presence in the world marketplace. Vying for global custom it trades with governments desperate for economic regeneration, prepared to soften policies such as low corporate tax rates and the availability of land sites that meet industrial locational requirements securing much-needed foreign investment. It details, shockingly, the extent of the role played by the pharmaceutical industry in Ireland’s economic upsurge, arguing that the Celtic tiger’s drug induced performance was enhanced when sixteen of the top pharmaceutical companies established facilities in the Republic. Between 1996 and 2003, Ireland’s exports of pharmaceuticals increased by an incredible 1,514% accounting for almost a quarter of Irish exports. These investigations also expose an ingratiating “partnership” between the industry, healthcare professionals and the academic world through funding research facilities and up to 80-90% of post-graduate training. The recent controversy surrounding Glaxo Smith Kline and key clinical trial data on an anti-depressant suggests that this ethical entanglement enables drug companies to subtly influence their own research agenda, suppressing unfavourable findings. Most shocking, however, is the accusation that Pfizer, whose market value of $266 billion, larger than the combined GDP of the eighteen biggest economies in sub-Saharan Africa, legally blocked attempts to produce cheaper versions of HIV/Aids drugs in the disease ravaged continent. Such behaviour could be described as a pharmaceutical regime, parasitically earning off the very people it claims to serve. While the topics Power, Politics and Pharmaceuticals cover are vast and the terminology quite scientific, it is brilliantly edited to make for insightful yet uncomfortable reading. Despite its blistering attack on the industry it argues for independent, patient accountable regulation as the remedy to return it to a patient, not profit led organisation. When medicine is traded on the global economic floor like oil or steel then the very ethos of healthcare has a price. What this book argues passionately is that beneath the white coats of the pharmaceutical world there are the designer suits of corporate commerce manipulating the costs of our health, our lives and even our deaths.

Dr Patrick Rowan looks at a new book which examines the business of prescription drugs. This series of essays is primarily concerned with the pharmaceutical industry in Ireland, but it also has reference to the industry in Canada, Australia and in the United Kingdom. They cover the regulation of the licensing of new prescription drugs, their follow-up for significant side-effects and the global consequences of companies maintaining high prices for these drugs — irrespective of particular countries’ economies. In general, a critical approach is taken on how the trans-national pharmaceutical companies operate. Ireland has benefited enormously (financially) since foreign pharmaceutical companies began to establish bases here in the 1990s. The 12.5% corporation tax and an educated English-speaking workforce was reputedly a big factor in their choosing Ireland over other EU countries. By 2004, 24,000 people were employed in these companies and annual exports of pharmaceutical products were worth over US$30 billlion. American pharmaceutical companies constitute 44 per cent of the total, German firms have 14 per cent, with lesser percentages from other countries. It is only natural that the Irish Government should regard the locating of these companies in Ireland as a great achievement, especially as the employees are, on average, paid better than their peers in other companies. Patent rights Pharmaceutical companies always claim that the high price of new drugs is due to the cost of producing them, which is understandable as the cost of bringing a new drug to market is very high. In 1995, under the Intellectual Property Rights Agreement, patent rights for 20 years were given to these companies where the drug was found to be innovative and useful. This embargo curbs the flow of cheaper generic offspring, but it also means that companies tend to concentrate on the lucrative markets and find it less profitable to produce drugs for the more unusual tropical diseases. Prescription drug regulation began in Ireland in the 1960s, following the thalidomide disaster. The Irish Government washed its hands of the thalidomide victims until it was shamed into acknowledgement in 1973. John Abraham, Professor of Sociology in the University of Sussex, tells in his essay how very concerned he is that certain drugs were allowed on to the market. He cites the case of Opren, a drug that had treated only 39 patients and was then publicised in the media as a drug capable of modifying the course of rheumatoid arthritis. Halcion is banned in England, Norway and Denmark, but its use in Ireland and the USA is permitted. Abraham is critical of the American Food and Drugs Administration (FDA) for its interpretation of the safety of this drug. He feels that the FDA, like our Irish Medicines Board, is not an ideal organisation to vet these drugs since both are financed largely by the fees paid to them by the drug companies. Better informed There appears to be general agreement that patients should be better informed about the risks of newly-released medicines. Post-marketing surveillance of new drugs should be more thorough, but it is way down the scale in comparison with getting of approval for the sale of new drugs. It might be worth mentioning in this context that it is found that few health professionals report the drug reactions that they encounter. In the UK, the Medicines and Healthcare Products Regulatory Agency (MHRA) is regarded as one of the best such organisations in the world, but it took a BBC ‘Panorama’ television programme to alert the public to the withdrawal side-effects of Seroxat. Yet, the original licence application recorded that when patients stopped taking this drug, 30 per cent suffered withdrawal reactions. Dr Andrew Herscheimer, who founded the Drug and Therapeutic Bulletin, states in his essay that the discovery of the problems with the selective serotonin reuptake inhibitors showed serious deficiencies in the UK regulatory system. Drug companies make great efforts to publicise products. This is to be expected, but how they go about it can cause problems for the medical profession. In the US, direct to consumer advertising is allowed. Following America? In Canada, disease-awareness advertisements are permitted and the name and price may be shown, but the two may not be shown together. Now disease-awareness advertisements are appearing on our own TV screens. Are we likely to follow the American model? The purpose of this book is to show the haphazard nature of the regulation of prescription drugs, how drugs like Celebrex and Vioxx were allowed to be introduced with claims that they were safer than the older NSAIDs, and also how further safeguards might be put in place in the future to ensure adequate pre- and post-marketing surveillance.It is in every doctor’s interest in read this book.

This is an original and very important book, breaking new ground in interdisciplinary social studies of contemporary Irish society and drawing into sharp focus some very disturbing features of state-market relations in Ireland today and their implications for society, communities and individuals. Furthermore, the book begins by placing its subject in a global context that makes it an illustration of much wider power shifts that characterise our globalised world. It thus provides a badly needed rejoinder to the euphoric reception of globalisation discourse among policy elites and opinion formers in Ireland. In her introductory chapter, Orla O’Donovan signals the book’s ambitious reach. Beginning with a tragic case of a suicide that, it is believed, was prompted by the effects of the antidepressant drug Seroxat prescribed to the victim, she situates this case as one example of a growing concern internationally at the nature of state regulation of the pharmaceutical industry. The book is therefore essentially about the implications for people’s health of the existing system of pharmaceutical drug regulation but the editors are to be greatly commended for the many different optics through which the subject is treated. This is what makes the book so original and challenging (and scary) as it includes not only political economy and sociological accounts but also those of doctors, of pharmacists, of a psychotherapist and of a pharmacologist. While Ireland is principal case studied, chapters on Canada, the UK and Australia show that the Irish case is not unique. To this reviewer, the most revealing of all the chapters is the one on bias and science in knowledge production by John Abraham, a sociologist who is co-director of the Centre for Research in Health and Medicine at the University of Sussex. This illustrates convincingly through three case studies that ‘bias towards the commercial interests of the pharmaceutical industry is a problem in the science of drug testing and regulation’ (p. 45) which is evident in ‘a great deal of technical manipulation’ of the scientific evidence, an inconsistency of interpretation of types of data, technically contradictory treatments of scientific findings and a deference towards interpretations supplied by the drug companies (p. 52). A number of contributors examine how the dynamics of this bias towards commercial interests plays out in Ireland which is described by Denis O’Hearn and Stephen McCloskey in their chapter as ‘the key producing and exporting region in Europe for most of the transnational drugs producers’ (14). In Chapter 4, Orla O’Donovan traces the evolution of state regulation of pharmaceutical drugs in Ireland, from a situation at the time of the thalidomide drug disaster in the 1960s when the state washed its hands of any responsibility, to a form of ‘hands-off’ regulation with the establishment of the National Drugs Advisory Board in 1966 which was underfunded and relied on reporting of adverse drug reactions by health professionals. Increasingly criticised for its slowness in processing licence applications, it was replaced in 1995 by the Irish Medicines Board which is largely funded by the pharmaceutical industry. Not surprisingly, O’Donovan concludes that ‘medicines regulation in Ireland has followed a neo-liberal pharma-friendly course’ (p. 80) but perhaps most telling is her finding that ‘within parliamentary arenas the industry-financing arrangement was generally perceived to be laudable’ (p. 73). Kathy Glavanis-Grantham uncovers in her chapter what she identifies, in relation to the pharmaceutical industry, as ‘a web of intersecting and mutually supporting interests between transnational capital, the state and the educational sector in Ireland’ (102). Her account of the extensive involvement of multinational pharmaceutical companies as significant funders of academic activities in UCC raises the need, as she herself writes, to examine ‘the ways in which the pharmaceutical industry has come to influence health priorities and scientific research’ in Ireland (p. 100). Her chapter is also noteworthy for describing forms of resistance to the growing influence of the industry, particularly the activities of a small Irish organisation, Medicines for All, formed in 2003 by a group of professionals. It is, however, the chapters by health professionals that help underline the immense importance of the book’s analysis for every user of the Irish health service. This is what gives this book its unique edge, bridging very effectively the gap that often exists between academic analyses and the experiences of citizens. The chapters by Colin Bradley (professor of general practice at UCC) and Terry Lynch (a GP turned psychotherapist) are particularly revealing. Bradley examines the differing interests of the pharmaceutical industry, of doctors, of patients and of the state, describing the various forms of ‘entanglement’ between industry representatives and doctors through, for example, regular visits, the regular receipt of hospitality at a variety of educational and other meetings (the industry has ‘a very major involvement in the provision of postgraduate educational and continuing professional development in Ireland’ (p. 125)), and the testing of drugs. Bradley writes that ‘medicine is a more explicitly commercial enterprise in Ireland than is the case in many other European countries’ (p. 129) and he wonders if the industry and doctors are entwined or entangled, or if doctors are ensnared. He goes for the middle option. Lynch’s chapter complements this when he writes of his experience that most doctors do not question the industry representatives, rely on them for information and fail to question their practice when evidence emerges of the malign effects of certain drugs they widely prescribe (as in the example with which the book opens). The failure of the medical press to keep a critical distance from the industry and even to report on evidence about the ill-effects of drugs is a particularly disturbing aspect of this chapter. This book deserves very wide and careful reading in the hope that it might stimulate a more critical awareness of the power of an industry to affect the ways we look at our own health and seek to ensure our wellbeing, both mental and physical. It raises issues of the utmost concern about global and local politics and their relationship with some of the world’s most powerful companies. If any criticism can be made it is simply that it would have benefited from a final concluding chapter drawing together the various rich strands of the argument. It challenges all of us as social scientists to produce work that gets to the heart of the implications for our social and personal well-being of the extensive restructuring of Irish society over recent decades.